Court disposes of writ petition on recovery priority amidst Insolvency & Bankruptcy Code Moratorium.

The court disposed of the writ petition concerning the priority of recovery of outstanding liabilities from M/s R. P. Basmati Rice Ltd. due to the Moratorium declared under Section 14(1) of the Insolvency and Bankruptcy Code, 2016. The National Company Law Tribunal's Moratorium affected the recovery process, leading both parties to agree that the petition had become irrelevant. Consequently, the court ordered the disposal of the petition in light of the Moratorium's implications, preventing further legal actions against the corporate debtor.

---

---

Issues:
1. Priority of recovery between petitioner and respondent-bank/department regarding outstanding liabilities from M/s R. P. Basmati Rice Ltd.
2. Impact of Moratorium declared under Section 14(1) of the Insolvency and Bankruptcy Code, 2016 on the present writ petition.

Analysis:
1. The primary issue in the writ petition was the precedence for recovering outstanding liabilities from M/s R. P. Basmati Rice Ltd. The petition was filed under Articles 226/227 of the Constitution of India seeking to quash a notice issued under Section 226(3) of the Income Tax Act, 1961 by respondent No.2. Both parties agreed that an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 had been admitted by the National Company Law Tribunal, Chandigarh Bench, declaring a Moratorium under Section 14(1) of the Code. This Moratorium affected the recovery process, rendering the present petition infructuous.

2. The Moratorium issued by the NCLT had significant implications on the present writ petition. It encompassed various restrictions, including the institution or continuation of suits, transferring or disposing of assets, enforcing security interests, and property recovery actions against the corporate debtor. The counsel for both parties acknowledged that due to the Moratorium, the petition had lost its relevance and should be disposed of accordingly. Therefore, the court ordered the disposal of the petition in light of the Moratorium declared under the Insolvency and Bankruptcy Code, 2016.

This detailed analysis of the judgment highlights the issues of priority in recovering outstanding liabilities and the impact of the Moratorium under the Insolvency and Bankruptcy Code, 2016 on the writ petition, ultimately leading to its disposal.

---